FOLLOW UP RANGEBOUND (CONSOLIDATING) NIFTY FIFTY

On Sunday 2nd Oct mentioned that nifty is consolidating between 4720-5230. Observe the chart below yesterday it made low of  4728.3, today right now it is trading at 4770.75. 

Will it hold 4720 today also? I f it holds and also closes above 4758.85, low made on 29/9/11 possibility of bounce back (up move) increases.

Right now it looks like today it will form inside day, if it happens and time permits may write about inside day.

By the way according to our trading system today we booked profit in short (sell) position initiated on 30/9/11.Booked profit at 4801.95 (profit of 143 points). We just booked profit (exited sell position), not initiated reverse trade as of now. Our system not yet initiated buy (long) signal.  

RANGE BOUND (CONSOLIDATING) NIFTY FIFTY

As mentioned on 5th Sept. our dear nifty is consolidating between 4700-5200 range. To be precise from 4720-5230.

Since 5th Aug. i.e. almost for 2 months nifty is trading within this band of 500 points. So break of this range will give good trading opportunity. Since current technical setup is bearish and there are lot of negative news it will looks like eventually it will breakdown for target of 4200-4400. At the same time always remember that trading is game of probability and it is not prediction so always think of opposite possibility also and if market turns opposite to your trade be ready to book losses and reverse your trade.

At the same time if you can see the above weekly chart 4700 is strong support, it may try to hold 4700.

The above monthly chart shows that if support 1 around 4700 is taken out, the next support (i.e. target will be) 4300-4400.

By the way if you can see the performance link given on right side of blog our improved strategy has given sell signal on Friday 30 Sept.

HOW WE MAKE MISTAKES WHILE TRADING

Even though our trading system is giving good result, we added one more indicator last month and back tested, the result was even though profit remained almost same, number of trades decreased. We thought it is better to add this indicator so as to reduce number of trades, which proved wrong since if we don't added   this indicator we have exited our buy (long) position 200 points earlier and also would have taken short (sell) position 200 points earlier i.e. unnecessary loss of 400 points, so once again when time permits we will analyze effect of this indicator and if necessary we will remove that indicator from our system.

CONCLUSION :- Don't try to become smart than MR. MARKET, MR. MARKET is always right, try to identify your mistake!

In performance sheet we are not changing trades taken (last and present), just in cell near where total profits/ loss is shown also show total profit/ loss without this indicator. 

FAILED ASCENDING TRIANGLE

As mentioned in yesterday's post the making of ascending triangle failed, since instead of breakout today on hourly chart at 10 AM it broken down the support line and what a great fall after that.

That is why trading is called as game of probability i.e. you should always think of other possibility also and ready to take the opportunity.
NOTE :- These post's are for informative purpose for those who are trying to learn technical analysis and also to refresh our knowledge.
 At present according to our improved strategy we are still in buy (long) position.

CAUTION : LARGER TIME FRAME IS STILL DOWN 
DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

? ASCENDING TRIANGLE MAKING ON HOURLY CHART

As shown in above chart right now there is ascending triangle making in progress on hourly chart. If the overhead resistance which is at 5170 is taken out, and it also goes above 5230 which is the lower border of gap (5330-5230) created on daily chart on 5/8/11, it will try to fill the gap i.e. will reach upper border of gap.
     
         The target for ascending triangle breakout will be5620 i.e. 5170-4720 =450 points, hence 5170 +450= 5620.

Also as in above chart 50EMA is approaching 200EMA on hourly chart. If 50EMA crosses above 200EMA which is known as GOLDEN CROSS, our dear nifty will become bullish in short time frame.

CAUTION : LARGER TIME FRAME IS STILL DOWN 
DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.